Technical updates – December 2018
Review of charities’ reserves policies
The Charity Comission reviewed charity reserves policies from a sample of 106 accounts for charities with income over £500k. 64% fully met the requirements to explain the charity’s policy on reserves, state the level of reserves held and state why reserves are held. Only 22% correctly stated the level of reserves held. The CC will recommend to the charity SORP making body that guidance on the calculation of reserves is improved.
Change your charity’s financial year
New Charity Commission guidance on how to change a charity’s financial year and the restrictions on changes. There are two sets of rules (1) for CIOs and unincorporated charities (2) for incorporated charities.
Fraud Advisory Panel help sheet: Legacy fraud
Guide for charities on legacy fraud covering what it is (charities do not receive the correct amount due), who carries it out, how it is carried out, and the basic controls, checks and warning signs for charities.
NCVO: Brexit and the voluntary sector, preparing for change
Considers the risks and opportunities for charities of Brexit and includes a charity Brexit checklist. The main risks are identified as economic impact, employing EU27 nationals and EU funding. The main opportunities are reform of the VAT, state aid and public procurement rules.
OSCR: Changes to charity accounting requirements
The Scottish Government is to update the Charities Accounts (Scotland) Regulations 2006 to bring them into line with SORP update bulletin 2. The changes will affect larger charities (income ≥ £250,000), all charitable companies, and charities that use the Housing and Higher & Further Education SORPs. Once the changes have been made, OSCR will provide more guidance.